The goal of everything I do is to help you keep more of what you make. That’s why I was very disheartened to read a new survey that said a lot of high income earners are basically living hand-to-mouth.
A survey by SunTrust found that one-third of higher income Americans live paycheck to paycheck with no savings. These are people with family incomes of $75,000 or more, which is much more than most people make.
What’s going on?
The survey also found that even among those earning $100,000 or more, about a quarter of those people can’t make ends meet either!
I know many of us have expenses that seem to be back-breaking. But the reality is we’re talking about incomes that are much higher than the rest of the country.
A lot of it has to do with how we’re spending that money. SunTrust found the area that hurt a lot of people was eating out. Almost three quarters of higher income people who were not saving were spending big money out on the town.
Read more: 23 ways you can improve your finances today
It’s amazing to think that food alone would create financial hardship, but that’s what seems to be a major factor!
What can you do about it?
Here’s what I say to you if you make higher than average income and there’s never enough money: Deduct money from your paycheck first for savings and investment in your future before anything else. If you have a 401(k) at work, start saving money through automatic withdrawals each time you get paid.
Read more: 7 ways to know if you’re saving enough money
If you’re saving nothing right now, start small. Save one penny out of every dollar you make. That’s 1% of your income. Then every 6 months, step it up by one more penny. In 5 years, you’re saving 10% and you’ll change your future. See my investment guide for help getting started.
And then if you need to, go to cash. No more plastic. No more reward cards. Just pay cash. I don’t mean a debit card either. I mean actual green money. On payday, take out your money and that’s what you live on until next payday.
The psychological effect of seeing your wallet thin out as the week goes by has the effect of helping you live within what you’re making!
Of course, it’s your choice. You don’t have to do this. But if you’re making more money than the average bear, and you have financial difficulties, well I say the anxiety and stress that it causes isn’t worth it. Maybe it doesn’t stress you out. So if that’s the case, just keep doing what you’re doing!